(UNAUDITED BUT REVIEWED)
D.T.C. INDUSTRIES PUBLIC COMPANY LIMITED 
AND ITS SUBSIDIARY COMPANIES
NOTES TO INTERIM FINANCIAL STATEMENTS
1.	GENERAL INFORMATION
	1.1	Basis for the preparation of interim financial statements
		These interim financial statements are prepared in accordance with Accounting Standards Pronouncement No. 41 "Interim financial statements", with the Company choosing to present condensed interim financial statements.  However, additional line items are presented in the balance sheet, and the statements of earnings, changes in shareholders' equity, and cash flows as in the annual financial statements.
		The interim financial statements are intended to provide information additional to that included in the latest annual financial statements.  Accordingly, they focus on new activities, events and circumstances so as not to duplicate information previously reported.  These interim financial statements should therefore be read in conjunction with the latest annual financial statements.
	1.2	Basis of consolidation
		These consolidated financial statements include the financial statements of D.T.C. Industries Public Company Limited and its subsidiaries, The Direct Trading Corporation Limited and Summer Sun Company Limited and have been prepared on the same basis as that applied for the consolidated financial statements for the year ended 31 December 2002.  There have been no changes in the composition of the Group during the current period.
	1.3	Summary of significant accounting policies
		The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2002.

(UNAUDITED BUT REVIEWED)
2.	ACCOUNTS AND NOTES RECEIVABLE - TRADE
	The outstanding balances of accounts and notes receivable as at 30 June 2003 and 31 December 2002 categorized by their aging were as follows :-
(Unit : Thousand Baht)

Consolidated
The Company Only

30 June
31 December
30 June
31 December

2003
2002
2003
2002
Related parties




Not yet due
-
-
71,908
19,093
Overdue 




     -  Not more than 90 days
-
-
15,428
64,646
     -  More than 90 days
12,695
12,854
14,298
9,272
Total
12,695
12,854
101,634
93,011
Less : Allowance for doubtful accounts
(12,695)
(12,854)
(5,655)
(5,655)
Net
-
-
95,979
87,356
Others




Not yet due
30,310
37,906
4,955
5,867
Overdue 




     -  Not more than 90 days
39,858
25,696
8,265
3,950
     -  More than 90 days
18,936
10,488
1,344
1,212
Total
89,104
74,090
14,564
11,029
Less : Allowance for doubtful accounts
(6,516)
(4,516)
(1,163)
(1,163)
Net
82,588
69,574
13,401
9,866





Net accounts and notes receivable - trade
82,588
69,574
109,380
97,222
	

(UNAUDITED BUT REVIEWED)
3.	RELATED PARTY TRANSACTIONS
	During the periods, the Company had significant business transactions with its subsidiaries and related companies (related by the way of common shareholders and/or common directors) mainly in respect of purchases and sales of goods.  Such transactions, which have been concluded on the terms and basis determined by the Company and those companies, are summarized below :-



(Unit : Million Baht)

Consolidated
The Company Only


For the three-month 
For the three-month 


periods ended 30 June
periods ended 30 June
Pricing policy

2003
2002
2003
2002

Transactions with subsidiaries





(eliminated from the consolidated financial statements)





Sales of goods
-
-
68.51
80.00
Agreed price
Cost of sales
-
-
44.54
48.90
Agreed price
Other operating expenses
-
-
1.81
1.70
Based on agreement






Transactions with related companies





Purchase of goods
0.42
0.36
0.42
0.36
Agreed price
Sales of goods
-
0.37
-
0.37
Agreed price
Other operating expenses
1.36
1.09
1.36
1.09
Based on agreement






Transactions with related persons





   and director





Other operating expenses
-
0.45
-
0.45
Based on agreement
Director's welfare expenses
1.16
1.00
-
1.00
Based on the Company's regulation and related laws

(UNAUDITED BUT REVIEWED)



(Unit : Million Baht)

Consolidated
The Company Only


For the six-month 
For the six-month 


periods ended 30 June
periods ended 30 June
Pricing policy

2003
2002
2003
2002

Transactions with subsidiaries





(eliminated from the consolidated financial statements)





Sales of goods
-
-
113.61
142.80
Agreed price
Cost of sales
-
-
85.44
93.30
Agreed price
Other expenses
-
-
3.31
3.99
Based on agreement






Transactions with related companies





Purchase of goods
0.82
0.91
0.82
0.91
Agreed price
Sales of goods
-
0.69
-
0.69
Agreed price
Other expenses
2.66
2.20
2.66
2.20
Based on agreement
Transactions with related persons





   and director





Other operating expenses
-
1.50
-
1.50
Based on agreement
Director's welfare expenses
1.16
1.00
-
1.00
Based on the Company's regulation and related laws

		(UNAUDITED BUT REVIEWED)
	The outstanding balances of the above transactions have been separately shown in the balance sheets with the details as at 30 June 2003 and 31 December 2002 as follows :-


(Unit : Thousand Baht)

Consolidated
The Company Only

30 June
31 December
30 June
31 December

2003
2002
2003
2002
Trade accounts receivable - related parties




Subsidiary company




The Direct Trading Corporation Ltd.
-
-
95,979
87,356
Total trade accounts receivable




   - subsidiary company
-
-
95,979
87,356
Related companies




Recolte (S) Pte. Ltd.
410
410
410
410
Recolte MED (M) Sdn. Bhd.
37
37
37
37
Pentonic Enterprise Co., Ltd.
3,914
3,914
-
-
Treasure Win Trading Ltd.
1,441
1,441
-
-
Alcoures Co., Ltd.
1,685
1,844
-
-
Classmate Enterprise Co., Ltd.
5,208
5,208
5,208
5,208
Total trade accounts receivable - related companies
12,695
12,854
5,655
5,655
Total trade accounts receivable - related parties
12,695
12,854
101,634
93,011





Other receivable - related parties




Thai Metal Pen & Gift Industries Co., Ltd.
30
30
30
30
Recolte (S) Pte. Ltd.
2
2
-
-
Recolte MED(M) Sdn. Bhd.
1
1
-
-
Alcoures Co., Ltd.
4
4
-
-
Inter-Asian Broker Co., Ltd.
15
15
-
-
Total other receivable - related parties
52
52
30
30

		(UNAUDITED BUT REVIEWED)



(Unit : Thousand Baht)

Consolidated
The Company Only

30 June
31 December
30 June
31 December

2003
2002
2003
2002
Other payable - related parties




Subsidiary companies




Summer Sun Co., Ltd.
-
-
3,634
3,636
The Direct Trading Corporation Ltd.
-
-
359
911
Total other payable - subsidiary companies
-
-
3,993
4,547
Related companies




Treasure Win Trading Ltd.
2,635
2,635
-
-
Pentonic Enterprise Co., Ltd.
709
709
-
-
Total other payable - related companies
3,344
3,344
-
-
Total other payable - related parties
3,344
3,344
3,993
4,547
In 2002 a subsidiary received the return of goods and equipment from a foreign related company of approximately Baht 3 million for repayment of debt.  Those goods comprised inventory of the subsidiary and other goods which did not belong to the subsidiary.  During this period, the subsidiary sold these inventories to its related company and other customer total amount of Baht 0.8 million.
4.	PROPERTY, PLANT AND EQUIPMENT
	The Company and its subsidiaries has mortgaged its land and building thereon and machinery with financial institutions to secure against credit facilities and loans obtained from those financial institutions.

		(UNAUDITED BUT REVIEWED)
5.	INVESTMENTS IN SUBSIDIARIES ACCOUNTED FOR UNDER EQUITY METHOD
 (Unit : Thousand Baht)



Percentage
Investment
Company's name
Type of business
Paid up capital
of investment
At cost
Equity


Million Baht

30 June
31 December
30 June
31 December




2003
2002
2003
2002
The Direct Trading Corporation
Sales of pen and stationery






   Limited
products
15
99.00
14,850
14,850
-
2,000
Summer Sun Company Limited
Manufacturing and 







Sales of pen and stationery






Total investment in subsidiary (in the
products
12
99.00
11,880
11,880
4,311
4,356
   Company's financial statements)











26,730
26,730
4,311
6,356
During the current period, there were no dividend payments from the agree mentioned subsidiary companies.
In addition, as at 30 June 2003, investments in an subsidiary company with deficit in shareholders' equity are presented as a separate item in the Company's financial statements are as follows :-
 (Unit : Thousand Baht)


Paid-up
Equity
Investment
	
Type of business
Share capital
interest
Cost method
Equity method


Million Baht
%


30 June 2003





Excess loss over cost of investment in subsidiary company





The Direct Trading Corporation
Sales of pen and stationery




   Limited
products
15
99.00
14,850
(8,061)
Total investment in subsidiary which has excess of loss over cost of investment in the Company's financial statements



14,850
(8,061)


		(UNAUDITED BUT REVIEWED)
6.	INVESTMENTS IN RELATED AND OTHER COMPANIES
(Unit : Thousand Baht)




Cost method
Dividend


Paid-up
Percentage of 
30 June
31 December

Company's name
Type of business
capital
investment
2003
2002

Thai Metal Pen & Gift
Sales of pen and stationery





   Industries Co., Ltd.
products
500
19.00
95
95
-
Thumniti Public Co., Ltd.
Tax consultant
5,000
0.09
51
51
3
Total



146
146

7.	BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS


(Unit : Thousand Baht)

Consolidated
The Company Only

As at
As at
As at
As at

30 June
31 December
30 June
31 December

2003
2002
2003
2002
Bank overdrafts
69,316
66,551
55,836
53,033
Short-term loans
30,709
100,000
30,709
100,000
Trust receipts
138,000
43,918
138,000
43,918
Total
238,025
210,469
224,545
196,951
	Bank overdrafts and short-term loans from financial institutions of the Company are guaranteed by its subsidiary and related companies and secured by a mortgage of land, building and machinery.

		(UNAUDITED BUT REVIEWED)
8.	OTHER PAYABLE - RELATED PARTIES
	As at 31 December 2000, a subsidiary has requested for compensation claim from the Company for damaged inventories amounting to Baht 4.07 million.  The subsidiary recorded as inventory balance and allowance for liability from receipt of such inventory of Baht 4.07 million.  The subsidiary has performed the physical count of inventory of which the quantities counted were less than the qualities in the documents. Those discrepancies could not be concluded.  During 2001, the subsidiary has claimed for compensation from the Company of such inventory as received from customers in 2000 and of some damaged inventory received from customers during 2001 amounting to Baht 1.01 million.  The subsidiary has respectively issued credit notes of Baht 1.92 million to customers for those damaged inventory.  The value which the subsidiary discount to customers was less than that as per the documents by Baht 3.3 million (after the adjustment of exchange rates as at period end).  The subsidiary has recorded such discrepancies as other payable - related parties.
9.	LONG-TERM LOANS


(Unit : Thousand Baht)

Consolidated
The Company Only

As at
As at
As at
As at

30 June
31 December
30 June
31 December

2003
2002
2003
2002
Loans in Baht currency
1,179
1,901
1,179
1,901
Less : Current portion of 




               Long-term loan
(1,179)
(1,467)
(1,179)
(1,467)
Long-term loans - net of




   current portion
-
434
-
434

		(UNAUDITED BUT REVIEWED)
The Company's land, buildings, machinery and equipment together with future additions were pledged as collateral.  In addition, a subsidiary company pledged its land and buildings as joint collateral.
Under the terms of the above agreements, the Company and its subsidiaries must comply with certain conditions and restrictions stipulated in the agreements.
10.	CORPORATE INCOME TAX
	Corporate income tax for the period has been calculated after adding back provision for expenses which are disallowed for tax computation purpose.
11.	FINANCIAL INFORMATION BY SEGMENT
	The Company's and its subsidiaries' operations involve a single industry segment in manufacturing and sales for both domestic and export markets of pens and related products and are carried on in the single geographic area in Thailand.  As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.
	For the six-month periods ended 30 June 2003 and 2002, the export represented approximately 16 percent and 15 percent of total sales, respectively.
12.	COMMITMENTS AND CONTINGENT LIABILITIES
	12.1	As at 30 June 2003 and 31 December 2002, the Company and its subsidiaries had outstanding bank guarantees of approximately Baht 3.6 million and Baht 3.6 million, respectively (the Company only : Baht 3.2 million and Baht 3.2 million, respectively) issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business of the Company and its subsidiaries.

		(UNAUDITED BUT REVIEWED)
	12.2	As at 30 June 2003 and 31 December 2002, the Company has commitments in respect of lease agreements for land, building, machines and vehicle amounted to approximately Baht 5.4 million and Baht 11.0 million, respectively.
13.	FOREIGN CURRENCY RISK
	Below is the summary of Company and its subsidiaries's significant foreign currency-dominated assets/liabilities as at 30 June 2003, which were unhedged.
(Unit : Thousand)
Currency
Assets
Liabilities
USD
254
661
SGD
45
3
Yen
-
660
CHF
-
251
Euro
-
196
DM
-
8
14.	APPROVAL OF INTERIM FINANCIAL STATEMENTS
	These interim financial statements have been approved by the directors of the Company.
-  6  -


